CD PROJEKT Group Condensed Interim Consolidated Financial Statement: Q3 2019

Key insights

6 takeaways

01
CD PROJEKT Group reported 92.87 million PLN in Q3 2019 sales, a 38% year-over-year increase driven by The Witcher franchise and GOG.com.See it on page 7
02
Net profit remained stable at 14.9 million PLN as the company prioritized aggressive capital allocation toward the final development of Cyberpunk 2077 and GOG GALAXY 2.0.See it on page 8
03
The group maintains a strong liquidity position with 593.6 million PLN in cash and bank deposits, supporting strategic investments like Warsaw real estate and new merchandise operations.See it on page 14
04
Revenue is heavily export-oriented, with 96.37% of sales generated outside of Poland, led primarily by the North American market.See it on page 54
05
Development project expenditures reached a carrying amount of 441.2 million PLN, reflecting a long-term strategy of balancing infrastructure investment with operating cash flows.See it on page 47
06
The company successfully navigated a seasonally lower-revenue period by leveraging digital distribution and preparing for multi-platform launches on Nintendo Switch and iOS.See it on page 41

Summary

The CD PROJEKT Group’s financial performance for the third quarter of 2019 demonstrates a period of robust revenue growth fueled by its core intellectual properties and digital distribution channels. The organization achieved 92.87 million PLN in quarterly sales, representing a 38% year-over-year increase. This growth was primarily driven by the enduring popularity of The Witcher franchise and record-breaking performance from the GOG.com digital storefront. Despite these gains, net profit remained stable at 14.9 million PLN, as the company prioritized aggressive capital allocation toward the final development stages of Cyberpunk 2077 and the expansion of the GOG GALAXY 2.0 platform.

The company maintains a strong liquidity position, ending the quarter with an aggregate cash and bank deposit balance of 593.6 million PLN. This financial stability supports ongoing strategic investments, including the acquisition of real estate in Warsaw to accommodate organizational growth and the establishment of new corporate entities to manage merchandise operations. The group’s revenue remains heavily export-oriented, with 96.37% of sales generated outside of Poland, led significantly by the North American market. Digital distribution continues to serve as the primary revenue driver, underscoring the effectiveness of the group’s global distribution strategy.

Operational accounting during this period was characterized by the adoption of IFRS 16, which necessitated adjustments to lease liabilities and right-of-use assets without materially impacting the overall financial health of the firm. The group’s asset management reflects a long-term focus, with development project expenditures reaching a carrying amount of 441.2 million PLN. By balancing intensive promotional spending and infrastructure development with strong operating cash flows from preorders and royalties, the group successfully navigated a seasonally lower-revenue period while positioning itself for upcoming product launches across multiple platforms, including Nintendo Switch and iOS.